China Company Developing Nintendo Wii-like Service for $20

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Chinese company 3DiJoy Corp. is aiming to put a Nintendo-Wii like gaming service in households across China over the new few years. The target cost: US$20, a tenth of what the Wii gaming system goes for in the U.S.

The difference is that 3DiJoy's gaming service reduces the actual game machine, and instead will piggyback as an add-on for Internet Protocol television (IPTV) services being offered by telecommunication companies.

The gaming service resembles the Nintendo Wii in that it uses stick controllers, with built-in motion sensing technology inside. The games, however, can be played online by using an IPTV service.

"That will drastically lower the barriers to playing such games," said company CEO Li Hsu. "You do not need to connect the gaming box to a television set. You are already connected to the game through your television."

The company, based in Shanghai, is working to fill a void left by a government ban prohibiting popular gaming systems like the Wii and Microsoft's Xbox 360 from being officially sold in the China. This gives 3DiJoy a big advantage in the China market, even as other U.S. companies develop similar systems to allow for console-free gaming.

"These (overseas) game consoles are banned in China. So ours are legal. Those are not. That's one major difference," he said.

The company's gaming service was even featured in the Chinese local news, when Liu Yunshan, the head of China's Propaganda Department, played 3DiJoy's games in May.

3DiJoy, specializes in motion sensing gaming, and has been developing the technology for more than four years, according to Li. But the company's business strategy differs from overseas video game giants, like Sony or Nintendo. 3DiJoy's gaming service will not be widely available in retail stores, but instead the company is partnering with PC manufacturers and telecommunication carriers as a way to deliver their products.

In China, 3DiJoy is working with telecommunication carriers to enhance their IPTV services by offering motion-sensing games. China Telecom is already featuring the service, calling it "Tigan Youxi" or "Somatic Gaming", and selling it as part of an add-on.

3DiJoy sees their gaming solution as an affordable alternative. In the case of China Telecom, the carrier's IPTV service can cost around 30 yuan ($4) a month.

"There is enough hardware and computer boxes. Why would we need another piece of extra hardware to play such games?" Li said.

The company is planning on rolling out more of its gaming service in China through telecommunication companies, with the goal of it reaching tens of thousands of households in 2011. After that, 3DiJoy hopes sales for the service will grow exponentially, betting that tens of millions of people in China will be using high-end television subscription services like IPTV in the coming years.

China's Ministry of Industry and Information Technology said on Thursday that IPTV users in China already exceeded 5 million, and that the service is being offered in more than 20 provinces in the country.

Other overseas companies like OnLive and Playcast are also pushing out gaming services without the need for high-end hardware. But in the case of China, the video gaming market is still in its early stages and lacks game developers, said Yu Yi, an analyst with Analysys International.

"The software-side for this kind of gaming is not yet mature, so its hard for companies to release their own video game consoles," he said. "It will take some time for this family entertainment industry to develop."

Users in China, however, can still get their hands on popular video game systems by buying from the country's grey market. Local vendors will purchase the consoles from overseas and then bring them back to China to be sold to local customers.

But soon users in China will have another option for their gaming needs. The country's largest PC maker, Lenovo, is also trying to tap the video gaming market by launching its own console through the company's gaming unit Beijing Eedoo Technology. The company's eBox is slated to be released early next year in China, and features a controller-free technology that will allow users to play games using physical motions.

Eedoo is preparing 30 games being developed by both domestic and overseas developers to coincide with the launch. The company believes it can potentially reach 120 million households in China with the device.

"Motion sensing games are the trend for the next ten years," Li said, noting that both Sony and Microsoft are following Nintendo's footsteps by developing motion sensing gaming of their own. Microsoft's Kinect device for its Xbox 360 will be launched next month and also allows users to play games using their physical motions.

"If you say Microsoft is copying the Wii, then in that sense we are copying," Li added. "It's a motion sensing game, and Wii is the pioneer. But we feel that our device has a lot of advantages."

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